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Chapter:-I

INTRODUCTION
The importance of doing a project required through research work on the subject confining with the
domain of it. A project is basically done with the aim of attaining both theoretical as well as practical
knowledge about the subject. The project is all about the Alternative Dispute Resolution (ADR)
Mechanism. Being a country of socialist, secular, sovereign, democratic, republic, India and other
countries in the world has adopted the ADR System with a view to provide effective justice to the
consumer of justice and to overcome the delay with a view to bringing an end to the litigation
between the parties at an early stage. There is a great need of achieving the ADR System and
implement such for the easy access of justice. The soul of government is to seek justice for the
people. Our Constitution therefore highlights triple aspects of economic, political and social justice.
In India, this branch of alternative disputes resolution system is in a nascent stage in view of the
modern techniques tactics used in this system. The primary goal of ADR Mechanism is to do justice,
yet dispute resolution and justice cannot be used interchangeably.

To do a research more, there is an importance and necessity of adoption and following different
research methodology. This is based on the idea that if we define the term ‘ research’ into two parts,
it stand as re plus search means dealing with the topic in an elaborate discipline and descriptive way
to find out whether something new can be inducted or it can be deduced on whatever materials are
available on the topic in the hand of the researcher. Research means the researcher is re- searching
on the topic referred on which the work is done. The research is to be made keeping in view to re-
inventing the same domain looking into form a different perspective. In fact, it is a method of the
researcher is to focus on the other aspect through work that has been done earlier. It can be either
doctrinal and empirical.

The research methodology adopted for the purpose of the project is both the doctrinal and empirical
for my project. I have collected the materials through different sources like books, articles, journals,
websites etc, available at our college.

Chapter II deals with the Alternative Dispute Redressal Mechanism (ADR). I have opted doctrinal
method for it and I have highlighted the importance of ADR Mechanism in the present context. The
main objective is to render the speedy justice and to access the fair justice delivery system in the
society for all.

Chapter III deals with the Arbitration and Conciliation, where I have opted the doctrinal
methodology. Here the role of arbitrator , arbitral award and importance of arbitration have been
highlighted. Basically, the process of arbitration is utilized in commercial and labour disputes in
domestic and international areas. The decision of arbitrator is final and binding in nature.

Chapter IV deals with the Lok-Adalat. I have opted both the doctrinal and empirical methodology.
Here, the importance, need, jurisdiction, functions, power and relevancy have been highlighted on.
Lok Adalat is considered to be one of the most significant mode of alternative dispute resolution
mechanism. We have also visited various sites to gather the information for our first hand.
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Chapter V deals with the Legal –Aid Clinics. For this chapter I have adopted both doctrinal and
empirical methodology. We have visited (SUKNA) for the legal aid. This clinic are set up to promote
legal relief to the poor, needy and the backward sections of the society. In order to raise awareness
among the people, we have visited ‘SUKNA’, a nearby place. After having a research upon the people
living there, I found it was due to illiteracy, lack of awareness and unemployment, the people
became corrupted day-by-day. Thus, I found that it is the duty of every citizen, lawyers, students and
legal fraternity to impact awareness through free-legal aid and provide a healthy society.
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Chapter: II

ALTERNATIVE DISPUTE RESOLUTION

INTRODUCTION

India is a sovereign, socialist, secular, democratic republic. The constitutional goal to set-up an
egalitarian society and to secure to all its citizens- justice, social, economic and political. The object
of justice is mainly two-fold: Firstly , to determine the rights of the parties and Secondly, to provide
remedy. It is preferable to refer the advice of Abraham Lincoln: “Discourage Litigation . Persuade
your neighbors, make c.”1mposition whenever you can. As a peacemaker one should encourage
being a good human being, to refrain from restoring the lies. There will still be business enough.”1
The solemn object to generate healthy and harmonious co-existence of the people in the society and
that the lawyers of the legal profession has got an important role to play in the context of the
present social scenario and to make the wheel in the justice delivery system in our county less
burdensome form the pangs of frivolous litigation consuming unnecessary time. To overcome the
delay and to provide effective justice to the consumer of justice, it has become imperative that
resort should be had to alternative dispute resolution mechanism with a view to bringing an end to
litigation between the parties at an early date..

MEANING:- According to Halbury’s Laws of England , Alternative Dispute Resolution is a term for
describing the processes of resolving disputes in place of litigation and includes mediation,
conciliation, expert determination and early neutral evaluation. Alternative Dispute Resolution (ADR)
is also known as External Dispute Resolution. The most common format of ADR are mediation and
arbitration ADR is unusually used to describe a wide variety of dispute resolution system which is
indeed more economical and a time saving mechanism.

HISTORY OF ADR:- ADR is today being increasingly acknowledged in the field of law as well as in the
commercial sector. The very reasons for origin of ADR are tiresome processes of litigation, costs and
inadequacy of the court system. It provides a cheap and quick relief. There was the phenomenal
growth in science and technology. It made a great impact on commercial life by increasing
competition throughout the world. It also generated a concern for consumers for protection of their
rights. ADR emerged as a powerful weapon for resolution of disputes at domestic as well as
international level. It is developing as a separate and independent branch of legal discipline. ADR has
started gaining ground as against disputes, litigation and arbitration. The disputes includes divisions
of family business or disputes in matters involving joint interests etc. ADR has its special significance
in the filed of private international law.

ADR originated in the USA in a drive to find alternatives to the traditional legal system, felt to be
adversial, costly, rigid, over-professionalized, damaging to relationships and limited to narrow rights-
based remedies as opposed to creative problem solving. It was originated in 1970s. ADR is used
worldwide by Governments, Corporations and individuals to resolve disputes in most countries of
the world. Both in developed and developing countries the mechanism provided an amicable and
speedy solution for the disputes. In order to strengthen the judicial system, many countries such as
India, Bangladesh and SriLanka have adopted the Alternative Dispute Resolution mechanism (ADR).
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The first step had been taken in India in 1940s when the first Arbitration Act was passed. However
due to a lot of loopholes and problems in the legislation, it was implemented. After many year in
1996, The Arbitration and Conciliation Act was passed based on the UNICITRAL MODEL. With the
spread of ADR programmes in the developed and the developing countries of the world, creative
uses for and designs for Alternative Dispute Resolution (ADR) system and proliferating. Successful
programs are improving the lives of individuals and meeting to road societal goals, ADR programs
are worldwide implemented to facilitate the achievement of matters such as-

 Divorce

 Civil Rights Dispute

 Property Disputes etc.4

INTRODUCTION OF ADR IN INDIA:-

Alternative Dispute Resolution in India is an attempt made by the legislators and judiciary alike
to achieve the “Constitutional goal” of achieving complete justice in India. ADR first started as a
quest to find solutions to the perplexing problem of the ever increasing burden on the courts.
The reasoning given to ADR mechanisms before implementing is that the society, state and the
party to the dispute as soon as possible before it disturbs the peace in the family, business
community, society or ultimately as a whole. ADR uses the principles of Natural Justice in
consonance with the Rule of Law.5

Alternative Dispute Resolution in India was founded on the Constitutional basis of Article 14 and
21 which deal with Equality before law and right to life and personal liberty respectively. These
articles are enshrined under Part III of the Constitution of India which lists the Fundamental
Rights of the citizens of India. ADR tries to achieve the Directive Principles Of State Policy relating
to Equal Justice and free legal Aid as laid down under Article 39-A of the Constitution of India.
The Acts which deal with ADR are Arbitration and Conciliation Act, 1996 and the Legal Services
Authorities Act, 1987. Section 89 of the Civil Procedure Code, 1908. Thus ADR mechanism had
been adopted in India to protect the Socio-economic and cultural rights of citizens and lastly for
quickly disposition of the cases.

DEFINITON AND SCOPE OF ADR:-

Alternative Dispute Resolution (ADR) is supposed to provide an alternative not only to civil
litigation by adjudicatory procedure but includes about Arbitration itself. The institution of
Arbitration came into being as a very useful alternative to litigation. A method of dispute
resolution would be considered as a real alternative only if it can dispense with the adjudicatory
process, even if it is not wholly a consensual process. ADR can be defined as a technique of
dispute resolution through the intervention of a third party whose decision is not legally binding
on the parties . It can also be described as a mediation though mediation is only one of the
modes of ADR. ADR flourishes because it avoids rigidity and inflexibility which is inevitable in the
litigation process apart from high lawyer and court fee and long delays. ADR aims to provide the
parties with cheap, speedy and less formalistic remedy to the aggrieved party. It aims at
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providing a remedy which is most appropriate in the circumstances of the case. This makes ADR
as viable substitution of arbitration or litigation

GOALS OF ALTERNATIVE DISPUTE RESOLUTION:-

The four main Goals of (ADR) Alternative Dispute Resolution are:-

1. To relive court congestion as well as undue cost and delay;

2. To facilitate access to justice;

3. To enhance community involvement in the dispute resolution process;

4. To provide more effective dispute resolution.7

JUSTIFICATION OF ADR:

In the words of “JOHN RAWLS” ‘Justice is the first virtue of Social Institution, as truth is of system
of thought.’ It is one of the basic principle of Justice System is that everyone knows and accepts
the same principles of justice- social or natural.

CONSTITUTIONAL BACKGROUND:-

Indian Civilization put at about 6000 years back, at the dawn of civilization, (i.e. the age of
Vedas) , when habitation was growing at river banks was devised of urbanization, where the
creator was presumed to be the head of humanity with the dawn of civilization, man walking
into orderly society , state, nation, dependence on law for orderly conduct gained momentum
mechanism. With Indian courts piling u cases for millennium, alternative dispute systems had to
be found. Thus, this system took birth. The Constitutional mandate rescue operation began with
Justice V.R.Krishna Iyer and Justice P.N.Bhagwati’s Committee report: Weaker Sections thus
became enabled to approach law courts, right from Munsif Courts to the Supreme Court. CILAS
(Committee for the implementations of the legal aid services) also came on the scene and
initiated methods of solving civil disputes in non-legal fora non-formal fora. As per the
Constitutional provision “ it is settled law free legal-aid to the indigent person to whom who
cannot defend themselves in a court of law is a constitutional mandate under Article 39-A and
21 of the Indian constitution. The right to life is guaranteed by Article 21. The law has to help the
poor who do not have means i.e. economic means to fight their causes . Based in this, states
adopted (through state legal aid and advice boards) Lok Adalat Legal-Aid Camps, Family Courts,
village courts, mediation centre commercial arbitration women centre’s, consumer protection
forums etc. which are but various facets of effective Alternative Dispute Resolution System
(ADR) ..Mechanism.

IMPORTANCE OF ADR MECHANISM:

Following are the importance of ADR are:-

 Choice of mediator:- A ‘mediator’ can be chosen who have expertise in negotiation can
be effective in resolving the disputes or an expertise.
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 Problem Centred:- The mediation process focuses on the interests, legal rights of parties
and remedies in searching for a resolution.

 Control:- Each of the parties maintain control of the dispute and its resolution because
they design the settlement.

 Privacy:- Mediation takes place in private and therefore the details of the dispute and its
resolution need not to be publically disclosed.

 Freedom to Negotiate:- Because the process is confidential and takes place on a without
prejudice basis, the parties have the freedom to develop and consider innovative
settlement idea.

 Improved Relationship:- Mediation can pressure or enhance the relationship between

the parties.

 Time saving:- It saves a lot of time by allowing resolution in weeks or months compassed
to the court which can take years.

CHARACTERISTICS OF ADR SYSTEM:-

‘ADR’ is the “creation of incentives or pressures that force litigants to settle”. It has immense
comparative value. The features of ADR system are as follows:-

1. Access is limited to the person who has same interest or claims under the dispute.

2. The parties to the dispute have the power to choose their own judge.

3. Proceedings are held in public.

4. To commence proceeding and terminate the action consent of the court is immaterial.

5. The parties may directly participate in the proceedings.

6. The disputants participate in the proceedings bear the cost of the competitive
participation proceedings.

7. The modes of proof and argument are competitive.

8. The techniques of Alternative Dispute Resolution (ADR) are extra- judicial in nature.

9. ADR avoids rigidity and inflexibility which is inevitable in the litigation process.

10. ADR usually describe a wide variety of dispute resolution system which is indeed more
economical and a time saving mechanism. 11
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WHY ADR NEEDED?

The movement towards ADR was endorsed by a resolution at a meeting of chief

ministers and chief justices. The meeting emphasis that litigants should be engaged and
encouraged to adopt other methods because they provided procedural flexibility , saved
valuable time, and involved less expenditure and strain as compared with conventional
trials in civil courts. Hence, began the search for alternatives to the conventional court
system. A large number of quasi-judicial and administrative tribunals have been created
for quicker reliefs. All these tribunals and forums are in a way an alternative method of
dispute redressal. Now, ADR is rapidly developing in its won national institutions,
experience and theoretical and practical development and at the same time offering a
simpler cross-border dispute resolution approach. 12

The traditional institutions worked as main mean of dispute resolution not an

alternative. But now, the alternative dispute resolution (ADR) techniques avoid the cost,
delays and cumbersome procedure of formal court.

The soul of Government is justice to people. Our constitution, therefore, highlights triple
aspects of economic, political and social justice. This requires the creation of and ultra-
modern disseminating infrastructure and manpower, sympathetic and planned; need for
new judicare technology and models; and remedy oriented jurisprudence. 13

ADVANTAGES OF ADR:

To give a quick, effective relief to the people of India introduction of ADR for disposal of
cases expeditiously is the urgent need of the day.

1. It will render speedy relief to the parties.

2. It can be used at any stage of the proceedings.

3. It will reduce the burden of the court.

4. Parties have every right to approach the regular court when they fail to arrive at a
settlement.

5. Parties to the litigants are the best judge to resolve the dispute in a congenial
manner.

6. Technicalities of law and procedures, rules of evidence have no place in Alternative

Dispute Mechanism (ADR).

7. It can be used at any stage of the proceedings.

8. It is more time saving process to resolve the dispute compared with traditional
court-practice and procedure.

9. The informal atmosphere setting for disposal of cases.

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TYPES OF ALTERNATIVE DISPUTE RESOLUTION:-

Alternative Dispute Resolution Mechanism basically are of four types. Alternative

Dispute Resolution (ADR) is developing as a separate and independent branch of
legal discipline. It made a great impact upon the society by providing speedy
disposal of the litigation with cheap cost through its various components. The four
types of ADR Mechanism are:-

1. Arbitration

2. Conciliation

3. Negotiation, and

4. Mediation

1. Arbitration:- The process of arbitration is one of the methods of the ADR system.
According to Section 2 (1)(a) of the Arbitration and Conciliation Act, 1996,
‘arbitration’ means any arbitration whether or not administered by the
permanent arbitral institution. It is basically settlement of disputes by mutual
understanding or agreement by the parties. The decision of an arbitrator is an
award and is binding on the parties. Thus the key ingredients of ‘Arbitration’ are
as under:-

i) There is an arbitration clause in the agreement to resolve the disputes

by means of arbitration.

ii) There is dispute between two or more parties.

iii) There is arbitrable dispute in terms of agreement between the parties.

iv) Dispute is referred to the third persons other than a court of competent
jurisdiction

v) Persons constituting arbitration should resolve the dispute in a judicial

manner that is by hearing both parties.

2. Conciliation:- It is one of the form of ADR system. In India, the present

Arbitration and Conciliation Act, 1996 contains various conciliatory provisions
for the settlement of disputes. The system of conciliation usually used in case of
industrial disputes, commercial transaction and matrimonial matter. It is also
recognized as a method of amicable settlement of disputes in International
commercial relations. Conciliation is the best inexpensive , informal and
autonomous method of resolution. Conciliation must be restored in order to
settle consumer disputes of all categories of people. Conciliation is a voluntary
process by which settlement of dispute arrived at between parties by the
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intervention of a third person, who is called ‘conciliator’. Mostly labor disputes

are settled through this process as conciliator is a prerequisite to legal service
strike or lockout action.

3. Negotiation:- This is also one of the dispute management process under the
ADR program. This kind of ADR programme is responsive, participatory and likely
to pressure relationship between the conflicting parties under the process,
according to W.L.Urey , J.M. Brett and S.B.Goldberg “Dispute can be resolved at
various level respects the might is right” phenomenon prevalent in early society,
where the disputants engage is a contest of strength through political process ,
industrial action or armed conflict, and the result goes in favours of the powerful
party. Negotiation can take place without skillful communication between the
parties. The expression ‘negotiation’ connotes mutual concession between the
disputants. In view of Gemmy Pearson Banes “Negotiation is a resolution of a
disagreement using give and take policy within the context of a particular
relationship. It includes sharing of ideas, thoughts and information and
expecting a common acceptable result. According to M.Ausey 17,”Negotiation is
a verbal interactive process, it is involving two or more parties who are seeking
to reach agreement over a conflict on behalf of the parties.

The following are the essential ingredients of ‘negotiation’:-

i) It involves disputes.

ii) It is a communication process between the parties.

iii) It is a purely voluntary process.

iv) Its outcome is not binding.

v) Disputants have control over procedure and outcome.

4. Mediation:- It is a very common kind of the ADR programme. In this process a

third party sought to mediate in resolving dispute between pollutants. In other
words, ‘mediation’ as necessarily search for a solution, under the guidance of
the third party. The basic object of mediation is to provide the disputants with
an opportunity to negotiate and explore clues and tricks for settlement of
disputes. It is an informal process in which an expert, who act as a mediator
assists the parties to reach settlement mandate. In mediation process a
mediator does not adjudicate that who is wrong or right as he/she has no
authority to impose a settlement on the disputants. This kind of ADR
programme is globally recognized and practiced.. 18

CONCLUSION:

In the conclusion we observed that Alternative Dispute Resolution mechanism

plays a vital role in imparting justice through the four components i.e.,
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Arbitration, Conciliation, Mediation and Negotiation. It is true that ADR system

plays an important role in settlement of disputes by means of four components,
but in certain cases like- human rights, criminal offence and public legal rights
,perhaps ADR system is counter-productive in serving some objects concerned
to the rule of law. Various other components are also associated with the ADR
system such as Lok Adalat, Legal-Aid camp etc. It reduces the problem of
overburdened of the court and provides speedy redressal to the disputants.

But in the present context there is a great need of more concentration and
development of ADR system which is inexpensive and effective. The ADR is
basically needed in order to avoid-

i) Arrears of pending cases.

ii) Repeated adjournments.

iii) Sluggish Government Machinery.

iv) Concentration of litigants.

Despite of such flexible procedural mechanism, it lacks in certain

circumstances such as-

i) ADR encourages compromise, which may not be appropriate for

others.

ii) Outcome of the ADR mechanism is precedent.

iii) ADR settlement are private and cannot be subjected to public

scrutiny.

iv) ADR programme cannot correct systematic injustice.

v) ADR undermines the judicial reforms. 19

vi) ADR programme is not feasible in case of extreme powers

imbalance between the parties.

vii) ADR settlements do not have any educational or punitive or

deterrent effect on the public at large.

viii) Multi party cases cannot be dealt appropriately by means of

ADR system.

Thus a lot of professional training is required for the implementation of ADR system. We are in need
of trained lawyers and the personnel who are trained in techniques of negotiations, mediation,
conciliation, arbitration or counseling. Now it’s a high time to take a policy decision and determine
criteria and qualification for acting as a negotiator, counselor , arbitrators and conciliators who
should be nominated to the various boards in the ADR’s centres. The implementation of ADR is
indeed needed in order to achieve a true justice delivery system. This it can be said that solution lies
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somewhere else, all over the globe the recent trend is to shift from litigation towards Alternative
Dispute Resolution.
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Chapter: III

ARBITRATION

INTRODUCTION: According to the New Encyclopedia Britannica 21 , Arbitration is a legal method

of settling disputes between parties outside ordinary court procedure by deferring to a mutually
agreed upon the third party who has the authority to determine an “award”, a legally binding
decision. The process of arbitration is one of the methods of Alternative Dispute Resolution (ADR)
system. ‘Arbitration’ basically is the method of settling of a dispute by an arbitrator. The decision of
the arbitrator is known as an ‘award’.

According to Article 2 (a) of UNCITRAL MODEL LAW, “ Arbitration” is the means by which the parties
to a dispute get the matter settled through the intervention of an agreed third person.” In other
words Arbitration is a process that is carried out pursuant to an agreement to arbitrate the disputed
matter. The statement of object and reason of the Act recognizes that Indian economic reform will
become effective only if the nations dispute resolution provision are in tune with the international
regime. 22

In India, Arbitration and Conciliation proceedings are carried on and conducted in accordance with
the provision of Arbitration and Conciliation Act, 1996. According to Section 7 (4) of the Arbitration
and Conciliation Act, 1996 an agreement may be contained in the following-

a) A document signed by the parties.

b) An exchange of letter, telex, telegram, or other means telecommunication which provides a

record of agreement.

BACKGROUND OF THE ARBITRATION ACT”

“We should make the law of “arbitration” simple less technical and more responsible to the actual
realities of the situations but must be responsive to the Canons of Justice and fair play and make the
arbitrator adhere to such persons, process and norms which will create confidence not only by doing
justice between the parties but by creating sense that justice appears to have been done.”

Arbitration has a social purpose to fulfill today. Arbitration is a mode of settlement of disputes
evolved by the society for adjudication and settlement of the disputes and the differences between
the parties apart from the court of law.

It has a social purpose and great urgency today when there was been an explosion of litigants in the
court of law established by the sovereign power. It has a greater scope of acceptance today, when
there is a certain erosion of faith in view of the failure to appreciating the functions of the court of
law. But, in proceedings of arbitration there must be adherence to justice, equity, law and fair play in
action.
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The proceedings of arbitration must adhere to the principles of Natural justice and must be in the
practice which will lead to a proper resolution. During the proceedings settlement of the parties are
done by mutual understanding where the rights and liabilities of the parties are adjudicated which
are binding on them, such settlement made before the arbitral tribunal but not by the court of law.

SUBJECT MATTER OF ARBITRATION:

Any commercial matter including an action in tort if it arises out of or relates to a contract can be
referred to arbitration. However, public policy would not permit matrimonial matters, criminal
proceedings, insolvency matters, anti-competition matter or commercial court matter to be referred
to arbitration. Employment contract also cannot be referred to the arbitration but, director,
company dispute are arbitral. Generally, matter covered by statutory reliefs though statutory
tribunals would not be arbitral.

Arbitration covers arbitration based on the voluntary agreement by the parties of private nature or
by operation of law.

JURISDICTION OF THE ARBITRATION:-

The Act provides that the arbitral tribunal may rule on its own jurisdiction, including any objections
with respect to the validity of the agreement of the arbitration. Hence, the arbitration shall have
jurisdiction even if the contract in which the arbitration agreement is contained is vitiated by fraud
and or any other legal infirmity. If the pleas of jurisdiction is rejected, the arbitrator can proceed
with, the arbitration and the arbitral award. 24

SCOPE FOF ARBITRATION LAW IN INDIA:-

The globalization of trade and commerce and economic liberalization created need for the effective
implementation of economic reforms. It was realized that the earlier act was not enough to meet
the present day requirements. The multinational companies are pouring into India is the field of
banking, insurance, building construction, electricity, telecommunication, etc. and there is
commercial interaction between India and foreign countries where the parties have to agreed for
arbitration in case any dispute arising out of commercial activities in accordance with the Arbitration
and Conciliation Act, 1996, and the rules framed under the Act.

ESSENTIAL INGREDIENTS:-

1. There is an arbitration clause in the agreement to resolve the dispute by means of arbitration.

2. There is dispute between two or more parties.

3. There is arbitral dispute in terms of agreement between the parties.

4. Dispute is referred to the third person other than a court of competent jurisdiction
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5. Person or persons constituting arbitration are under obligation to resolve the dispute or the
differences in ca judicial manner that is by hearing both the parties.

ARBITRATION AND CONCILIATION ACT: (1996)

The present Arbitration and Conciliation Act, 1996 is substantially based on the three statutes;

i) The foreign Awards (Recognition and Enforcement Act), 1961.

ii) The Arbitration Act, 1940 and;

iii) The Arbitration (Protocol and Convention ) Act, 1937..

The Act basically provides more responsive arbitration law to contemporary requirements and to
provide effective law relating to settlement of disputes of both domestic and international disputes
regarding commercial intercourse. Undoubtedly , the arbitration and conciliation act, in the
commercial transactions are getting global recognition as machinery for the settlement of the
disputes.

The Model law on International Commercial Arbitration has been adopted by the United Nations
Commissions on International Trade Law (UNICTRAL) in 1985. It has been adopted in view of the
desirability of uniformity of the law of arbitral proceedings and the specific needs of international
commercial arbitration practice.

It would be seen that the provisions of the Arbitration and Conciliation Act, 1996 are interpreted and
construed independently and thus it served as a model for the legislation on domestic arbitration
and conciliation.

ARBITRATION AGREEMENT:-

Section 2 (1)(b) of the Arbitration and Conciliation Act, 1996 provides, the expression “ Arbitration
Agreement.” An Arbitration Agreement means-

1) An agreement by parties to submit to the arbitration all or certain disputes which have
arisen or which may arise between them in respect of a defined legal relationship, whether
contractual or not.

2) An arbitration agreement should always be in writing.

3) An arbitration agreement may be in the form of an arbitration clause in contract or in the

form of a separate agreement.

4) An Arbitration agreement is an important segment of the Act , which requires careful

consideration and comprehensive study.
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ARBITRAL AWARD:-

Under Section 2 (1) (e) the word “Arbitral Award” is not defined but it states that it includes an
interim order. “The Arbitral Award” is the interim order in respect of any arbitral proceedings.
According to H.Lexicon- It is an instrument which embodies a decision of an arbitrator or
arbitrators as regards matters referred to him or them.

According to Russel- “ An Award in order to be valid, final, certain, consistent and possible must
decide the matters to be submitted to the arbitration. 27

TERMS AND CONTENTS OF ARBITRAL AWARD:-

1) The Arbitral Award must be in writing and signed by the arbitrator / arbitrators.

2) The Arbitral Award must be based on reasoning. It must be a speaking award.

3) The Arbitral Award must show date and place of arbitration.

4) The cost of the arbitration, shall be fixed by the arbitral award.

5) A certified copy of arbitral award is required to be delivered to each of the party.

6) If the arbitral award is for the payment of money, the arbitral award may include interest at
such rate as the arbitral tribunal deems reasonable.

7) The language used in passing the arbitral award must be free from any ambiguity.

ESSENTIALS OF ARBITRAL AWARD:-

1) An Arbitral Award must be in writing and signed.

2) The parties must be competent to initiate the arbitral proceedings

3) A sustainable arbitral award must be reasoned one section 31(3) of the Arbitration and
Conciliation Act, 1996.

4) There must be arbitration clause to assign disputes or differences before arbitral tribunal.

5) The contents of an arbitral award must be connected with the case of arbitration. 28
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A CASE STUDY ON:

T.P.GEORGE ---------------------------------- PETIOTIONER

VS.

STATE OF KERALA AND ANOTHER------------- RESPONDENT

AIR 2001 SC 816

JUDGES:- S. RAJENDRA BABU AND S.N. VARIAVA, JJ.

FACTS OF THE CASE:- This Appeal is against a Judgment dated 15th Feb,1989 filed by the
respondent was partly allowed. The appellant was awarded a contract for construction of a
“Main canal Draining Tunnel of the Kallada Irrigation Project”. The work was to be
completed by 4th March, 1983. Supplemental agreement dated 20th October, 1983 extending
the period of completion was entered into a dispute arose between the parties. The same
was referred to a sole arbitrator , who gave a reasoned award dated 12th August, 1985. The
respondent filed objection to the award, which were rejected by a Judge dated 31st March,
1986 and all the award was made by a rule of court. The claim was under Section 12 (i) , 12
(j), 12 (k) of the Arbitration and Conciliation Act, 1996. The award of claim under items 12 (i)
and 12 (k) were set aside and 12 (g) was upheld because the arbitration could not come the
term the term of the contract or agreement.

ISSUES DERIVED:-

 Whether the High Court was highest in setting aside the award of the interest from
the date of the award?

 Whether or not the supplemental Agreement was got executed?

 Whether the appellant was entitled to maintain his claim in view of the
supplemental Agreement?

ACTS REFERRED:-

 Section 34 of the Arbitration and Conciliation Act, 1996.

 Section 31 (7) of Arbitration and Conciliation Act, 1996.

 Section 4,10,16,34 (2) (a) (v) of Arbitration and Conciliation

Act, 1996.

ARGUMENTS OF RESPONDENT:
 P a g e | 17

Respondent pointed out that the supplemental agreement provided that such claims could not
be made and it was binding on the appellant. They also admitted that the High Court was highest
in the holding that the arbitrator misconduct himself by awarding country to the supplement
Agreement. The court has held in the case Secretary Irrigation Dept , Govt of Orissa vs. G.C.Roy
29
, about the case, the court held that in the arbitrator, arbitrator has the power to grant
interest pendent lite. Recently in the case of Executive Engineer vs. Dhenvamal Minor Irrigation
Division, 30 the arbitrator can award interest for care preference period.

ARGUMENTS OF PETITIONER:-

He pointed out the claim under Section 12 (k) was for revision of rates and under the original
contract the time for completion was fixed as on 4th March, 1983. He submitted that, the fault of
the respondent that the work could not be completed by the next time. In case of Jagdesh Rai
and Brother vs. Union of India 31, the court held that the award of interest right to be granted in
all cases, were there is a decree of money unless there are four stages of grant of interest viz:-

i) From the stage of accrual of cause of action of the arbitration proceed.

ii) During pendency of the proceeding before arbitrator.

iii) Future interest arising between date of award and date of decree, and

iv) Interest arising from date of decree, till the realization of award.

RATIO:-

It is to be seen that the question whether the supplemental Agreement dated 20th Oct, 1983
debarred the appellant from pursuing his claims was before the arbitrator. Such a question
having been referred to the another, the view of the arbitrator would be binding if it is one
which is possible. Thus, as per law laid down by the court, interest can be awarded at all four
stages. The reasoning given by the high court that interest cannot be awarded by the arbitrator
in thus; fallacious and cannot be sustained.

JUDGMENT:

The reasoning given by the High court that inherent power of court was that the interest cannot
be awarded by the arbitration is thus fallacious and cannot be sustained. The impugned order or
the judgment to the extent that is disallows the interest from the date of the award is set aside.

However, the impugned judgment to the extent that it uphold the award under Section 12 (j) is
upheld. The appeal stands disposed of according. There shall be no order as to costs.

CONCLUSION:-

It is to be concluded that the process of arbitration is one of the methods of the Alternative
Dispute Resolution Mechanism, where the decision of arbitrator is final in the settlement of by
 P a g e | 18

disputes. The role of arbitrator and decision through arbitration procedure provides Justice in
settling both domestic and international disputes. The provisions of the Arbitration and
Conciliation Act, 1996 are to be interpreted without any influence to seek justice through
settlements. It provides an effective law in dealing with domestic and international disputes
regarding commercial intercourse. The UNICITRAL MODEL LAW, provides a basic stage of
progressive piece of legislation in settling the commercial disputes. In different cases, we
observed that the Apex court held that, the process of arbitration is formulated and designed to
serve the cause of facilitating international trade and promotion by providing speedy settlement
of disputes arising in trade through arbitration and any expression accruing there to be receive
as a liberal construction. Thus India has put in place of progressive piece of legislation due to the
UNCITRAL MODEL OF ARBITRAION RULE..32
 P a g e | 19

Chapter:-IV

LOK ADALAT AND ITS IMPORTANCE: A PRATICAL

CASE STUDY

INTRODUCTION

Lok Adalat is one of the components of ADR systems. It is an Indian contribution to the
world jurisprudence of ADR. Lok Adalat (people’s courts), established by the government
settles dispute by the principles of justice, equity and fair play, which are the guiding factors
for decisions based on compromises to be arrived at before such Adalats.

Lok Adalat, as the name suggest means People’s Court. ‘Lok’ stands for People and the word
‘Adalat’ means Court. Lok Adalat is a special kind of people’s court in which disputes solved
by direct talks between the litigants. The members of legal profession, college students, social
organisations, charitable and philanthropic institutions and other similar organizations may be
associated with Lok Adalat. Salient features of these dispute resolutions are participation,
accommodation, fairness, expectations, voluntariness, neighborliness’, transparency and lack
of animosity. Lok Adalat after studying the case, try to solve the simple differences which
otherwise are likely to leave for reaching consequences through mutual understanding and
compromise. ADR has been an integral part of our historical past. Like the zero, the concept
of Lok Adalat (Peoples' Court) is an innovative Indian contribution to the world
jurisprudence. The institution of Lok Adalat in India, as the very name suggests, means,
People's Court. "Lok" stands for "people" and the vernacular meaning of the term "Adalat" is
the court. India has a long tradition and history of such methods being practiced in the society
at grass roots level. These are called panchayat and in the legal terminology, these are called
arbitration. These are widely used in India for resolution of disputes? Both commercial and
non-commercial. Other alternative methods being used are Lok Adalat (People's Court),
where justice is dispensed summarily without too much emphasis on legal technicalities. It
has been proved to be a very effective alternative to litigation.

The ancient concept of settlement of dispute through mediation, negotiation or through

arbitral process known as "Peoples' Court verdict" or decision of "Nyaya-Panch" is
conceptualized and institutionalized in the philosophy of Lok Adalat. Some people equate
 P a g e | 20

Lok Adalat to conciliation or mediation, some treat it with negotiations and arbitration. Those
who find it different from all these, call it "Peoples' Court". It involves people who are
directly or indirectly affected by dispute resolution.

The salient features of this form of dispute resolution are participation, accommodation,
fairness, expectation, voluntariness, neighborliness, transparency, efficiency and lack of
animosity.

The concept of Lok Adalats was pushed back into oblivion in last few centuries before
independence and particularly during the British regime. Now, this concept has, once again,
been rejuvenated. It has, once again, become very popular and familiar amongst litigants.
This is the system which has deep roots in Indian legal history and its close allegiance to the
culture and perception of justice in Indian ethos. Experience has shown that it is one of the
very efficient and important ADRs and most suited to the Indian environment, culture and
societal interests.1

The camps of Lok Adalats were initially started in the state of Gujarat in 1982. The first Lok
Adalat was organized on 14th March 1982 at Junagarh. Maharashtra commenced the Lok
Nyayalaya in 1984. The movement has now subsequently spread to the entire country. The
reason to create such camps was only the pending cases and to give relief to the litigants who
were in a queue to get justice. Lok Adalat is the only institutionalized mechanism of dispute
resolution in which the parties do not have to bear any expenses. There is no court fee in Lok
Adalat. If the case is already filed in the regular court, the fee paid is refunded in the manner
provided under the Court Fees Act if the dispute is settled at the Lok Adalat. This kind of
refund is an incentive given to parties to negotiate for settlement. Lok Adalat is a boon to the
litigant public, where they can get their disputes settled fast and free of cost.

MEANING OF LOK ADALAT

Lok Adalat (people’s courts), established by the government settles dispute through
conciliation and compromise. The First Lok Adalat was held in Chennai in 1986. Lok Adalat
accepts the cases which could be settled by conciliation and compromise and pending in the
regular courts within their jurisdiction. The Lok Adalat is presided over by a sitting or retired

1
www.legalserviceindia.com, on 16/11/14 at 06:20pm.
 P a g e | 21

judicial officer as the chairman, with two other members, usually a lawyer and a social
worker. There is no court fee. If the case is already filed in the regular court, the fee paid will
be refunded if the dispute is settled at the Lok Adalat. The procedural laws, and the Evidence
Act are not strictly followed while assessing the merits of the claim by the Lok Adalat. Main
condition of the Lok Adalat is that both parties in dispute should agree for settlement. The
decision of the Lok Adalat is binding on the parties to the dispute and its order is capable of
execution through legal process. No appeal lies against the order of the Lok Adalat. Lok
Adalat is very effective in settlement of money claims. Disputes like partition suits, damages
and matrimonial cases can also be easily settled before Lok Adalat as the scope for
compromise through an approach of give and take is high in these cases. Lok Adalat is a
boon to the litigant public, where they can get their disputes settled fast and free of cost.

The expression ‘Lok Adalat’ refers to a summary procedure for disposal of cases pending in
various courts through the process of arbitration and settlement between the parties at the
instance of the institution called Lok Adalat. Thus the expression Lok Adalat can be used in
the following two senses:
1. The process by which the cases pending in various courts are settled with the consent of
the parties in a summary way.
2. The institution which take initiative for arriving at a settlement of the case.
By virtue of Sec.19 of the Legal Services Authorities Act, 1987, every state authority, district
authority, Supreme Court Legal Services Committee or High Court Legal Services
Committee or the Thaluk Legal Service Committee may organize Lok Adalats for settlement
of cases pending in courts.
The Lok Adalat is presided over by a sitting or retired judicial officer as a chairman, with two
other members, usually a lawyer and a social worker. There is no Court Fee. If the case is
already filed in the regular court the fee paid will be refunded if the dispute is settled at the
Lok Adalat. The procedural laws, and the Evidence Act are not strictly followed while
assessing the merits of the claim by the Lok Adalat. Main condition of the Lok Adalat is that
both parties in dispute should agree for settlement. The decision of Lok Adalat is binding on
the parties to the disputes and its order is capable of execution through legal process. No
appeal lies against the order of the Lok Adalat.
 P a g e | 22

EVOLUTION

The evolution of this movement was a part of the strategy to relieve heavy burden on the
Courts with pending cases and to give relief to the litigants who were in a queue to get
justice. The first Lok Adalat was held on March 14, 1982 at Junagarh in Gujarat the land of
Mahatma Gandhi. Lok Adalats have been very successful in settlement of motor accident
claim cases, matrimonial/family disputes, labour disputes, and disputes relating to public
services such as telephone, electricity, bank recovery cases and so on.

Alternate Dispute Resolution (ADR), has been an integral part of our historical past.
The concept of Lok Adalat is an innovative Indian contribution to the world jurisprudence.
Lok Adalat means peoples’ court. India as a long tradition and history of such methods
practiced in the society at grass root level. These are called Panchayat and legally it’s called
arbitration. In Lok Adalat justice is dispensed.

Ancient concept of settlement of dispute through mediation, negotiation or through arbitral

process known as ‘People’s court verdict’ or decision of ‘Nyaya-Panch’ is conceptualised
instutionalised in the philosophy of Lok Adalat. The concept of Lok Adalat was pushed back
into oblivion in last few centuries before independence and particularly during British
regime.

Now this concept has been rejuvenated and became more popular amongst litigants. Camps
of Lok Adalat were initially started in Gujarat in March 1982, and now it has been extended
throughout the country. The evolution of this movement was a part of the strategy to relieve
heavy burden on the Courts with pending cases and to give relief to the litigants who were in
the queue to get justice. And the Legal Services Authorities Act 1987 gave a statutory status
to Lok Adalats pursuant to the Constitutional mandate in Art. 39-A of the Constitution of
India, contains various provisions for settlements of dispute through Lok Adalat.2

ORGANISATION OF LOK ADALAT

(1) Every State Authority or District Authority or the Supreme Court Legal Services
Committee or every High Court Legal Services Committee or, as the case may be, Taluk

2
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 P a g e | 23

Legal Services Committee may organise Lok Adalats at such intervals and places and for
exercising such jurisdiction and for such areas as it thinks fit.

(2) Every Lok Adalat organised for an area shall consist of such number of – (a) serving or
retired judicial officers; and (b) other persons, of the area as may be specified by the State
Authority or the District Authority or the Supreme Court Legal Services Committee or the
High Court Legal Services Committee, or as the case may be, the Taluk Legal Services
Committee, organising such Lok Adalats.

(3) The experience and qualifications of other persons referred to in clause (b) of sub-section
(2) for Lok Adalats organised by the Supreme Court Legal Services Committee shall be such
as may be prescribed by the Central Government in consultation with the Chief Justice of
India.
(4) The experience and qualifications of other persons referred to in clause (b) of sub-section
(2) for Lok Adalats other than referred to in sub-section (3) shall be such as may be
prescribed by the State Government in consultation with the Chief Justice of the High Court.
(5) A Lok Adalat shall have jurisdiction to determine and to arrive at a compromise or
settlement between the parties to a dispute in respect of - (i) any case pending before; or
(ii) any matter which is falling within the jurisdiction of, and is not brought before, any court
for which the Lok Adalat is organised:

Provided that the Lok Adalat shall have no jurisdiction in respect of any case or matter
relating to an offence not compoundable under any law.3

JURISDICTION OF LOK ADALAT

The Lok Adalat has no jurisdiction in respect of any case or matter regarding an offence not
compoundable under any law. It is impermissible for the Lok Adalat to enter into any
determination or to arrive at a compromise settlement in relation to a case or matter regarding
an offence which is a non compoundable one i.e. offence punishable.4 The Lok Adalat is not
empowered to issue direction upon an investigating officer to do a particular ting in a

3
Section 19, the Legal Service Authorities Act 1987.
4
Section 326, 397, 302, 307, the Indian Penal Code.
 P a g e | 24

particular manner to file report on the basis that the complaint was made on a
misunderstanding or mistake of fact.5

Lok Adalat has no adjudicatory function and they are not meant for pressuring the people and
bringing pressure on the public officials. The Lok Adalat has no jurisdiction to award less
than contractual rate of interest affecting the interest of the Bank as well as the interest of the
society by adopting the approach of “flexible and pragmatism” keeping their eyes revetted on
the disposal figures of the cases and on the encomiums to be received in print media and from
interest group.6 Lok Adalat has no adjudicatory or judicial function. Its function purely
related to conciliation.7

COGNIZANCE OF CASES BY LOK ADALAT

A Lok Adalat may take cognizance of cases, as per Section 20 of the Legal Services
Authority Act where: (I) (a) the parties thereof agree; or (b) one of the parties thereof makes
an application to the court for referring the case to the Lok Adalat for settlement and if such
court is prima facie satisfied that there are chances of such settlement; or

(II) the court is satisfied that the matter is an appropriate one to be taken cognizance of by
the Lok Adalat, the court shall refer the case to the Lok Adalat :

Provided that no case shall be referred to the Lok Adalat by such court except after giving a
reasonable opportunity of being heard to the parties.8

NEED FOR LOK ADALAT

Justice Ramaswamy says: “ Resolving disputes through Lok Adalat not only minimizes
litigation expenditure, it saves valuable time of the parties and their witnesses and also
facilitates inexpensive and prompt remedy appropriately to the satisfaction of both the
parties” Law Courts in India face mainly four problems: The number of courts and judges in
all grades are alarmingly inadequate. Increase in flow of cases in recent years due to
multifarious Acts enacted by the Central and State Governments. The high cost involved in

5
State of Kerala v. Eruakulam District Legal Sservice, AIR 2008 Ker 70.
6
Union Bank of India, Bhavnagar v. M/s. Narendra Plastics, Bhavnagar, AIR 1992 Guj 67.
7
Sukumar Ray, Alternative Dispute Resolution, Eastern Law House, ed.2012, at p. 90.
8
Section 20, Legal Services Authorities Act 1987.
 P a g e | 25

prosecuting or defending a case in a court of law, due to heavy court fee, lawyer's fee and
incidental charges. Delay in disposal of cases resulting in huge pendency in all the courts.

Lok Adalat has a positive contributory role in the administration of justice. It supplements the
efforts and work of the courts. Area of contribution chosen for the purpose specially concerns
and helps the common man, the poor, backward and the needy-most sections of the society.

WHY LOK ADALAT?

The Constitution of India is the fundamental law of the land. Part IV of the Constitution deals
with Directive Principles of State Policy. By virtue of Art.39-A the State is under a positive
duty to secure that the operation of the legal system promotes justice on the basis of equal
opportunity. The State shall also provide free legal aid to ensure that opportunities for
securing justice are not denied to any citizen by reason of economic or other disabilities.
By virtue of Article: 21, “no person shall be deprived of his life or personal liberty except
according to procedure established by law”. In Hussainnara Khatoon v. Home Secratery,
State of Bihar,9 , the Supreme Court held that “right to speedy trial” is a fundamental right
guaranteed under Art: 21 of the Constitution. Justice delayed is justice denied. Speedy trial
was held to be the essence of criminal justice.
In Suk Das v. Union Territory of Arunachal pradesh10, the Supreme Court held that failure to
provide free legal aid to an accused at the cost of the State unless refused by the accused
would vitiate the trial. He need not apply for the same. Free legal aid is at the State cost is a
fundamental right of an accused person under Art.21 of the Constitution.
A combined reading of Art.21 as interpreted by the Supreme Court of India and Art.39-A of
the Constitution establish beyond doubt that speedy trial, free legal aid and equal
opportunities for securing justice are fundamental rights of citizen of India and a
Constitutional mandate which state has to follow in governance of this country. In order to
ensure these rights more effectively, the Parliament enacted the Legal Services Authorities
Act, 1987 to organise Lok Adalat to secure that the operation of the legal system promotes
justice on a basis of equal opportunity.

9
AIR 1979 SC 1360
10
1986 5 SCC 401.
 P a g e | 26

COMPOSITION
The secretary of the high court legal services committee organising the Lok Adalat shall
constitute benches of the Lok Adalat. Each bench shall comprise of two or three of the
following:-
1. a sitting or retired judge of the high court.
2. a serving or retired judicial officer.
3. a member of the legal profession.
4. a social worker.
The secretary of the district authority organising the Lok Adalat shall constitute benches of
the Lok Adalat. Each bench shall comprise of two or three of the following:-
1. a sitting or retired judicial officer.
2. a member of the legal profession.
3. a social worker.
The chairman of the taluk legal services committee organising the Lok Adalat shall
constitute benches of the Lok Adalat. Each bench shall comprise of two or three of the
following:-
1. a sitting or retired judicial officer.
2. a member of the legal profession.
3. a social worker.
Jurisdiction both civil and criminal cases which are pending before the courts can be brought
before the Lok Adalat for settlement and award. However the Lok Adalat shall have no
jurisdiction in respect of any case or matter relating to an offence not compoundable under
any law. A case pending in a court may be referred to Lok Adalat on an agreement between
parties or on an application made by one of the parties to the court for referring the case to
Lok Adalat for settlement. So also the court can suo moto refer a pending case to Lok Adalat.

When cases are referred to a Lok Adalat, it shall make sincere efforts to bring about a
conciliatory settlement in every case put before it without bringing about any kind of
coercion, threat or undue influence, allurement of misrepresentation. Every Lok Adalat shall,
while determining any reference before it, act with at most expedition to arrive at a
compromise of settlement between the parties and shall be guided by the principles of justice,
equity, fair and other legal principles.
 P a g e | 27

PROCEDURE OF LOK ADALAT

The procedure followed at a Lok Adalat is very simple and shorn of almost all legal
formalism and rituals. The Lok Adalat is presided over by a sitting or retired judicial officer
as the chairman, with two other members, usually a lawyer and a social worker. It is revealed
by experience that in Lok Adalat it is easier to settle money claims since in most such cases
the quantum alone may be in dispute. Thus the motor accident compensation claim cases are
brought before the Lok Adalat and a number of cases were disposed of in each Lok Adalat.
One important condition is that both parties in dispute should agree for settlement through
Lok Adalat and abide by its decision. A Lok Adalat has the jurisdiction to settle, by way of
effecting compromise between the parties, any matter which may be pending before any
court, as well as matters at pre-litigative stage i.e. disputes which have not yet been formally
instituted in any court of law. Such matters may be civil or criminal in nature, but any matter
relating to an offence not compoundable under any law cannot be decided by the Lok Adalat
even if the parties involved therein agree to settle the same. Lok Adalat can take cognizance
of matters involving not only those persons who are entitled to avail free legal services but of
all other persons also, be they women, men, or children and even institutions. Anyone, or
more of the parties to a dispute can move an application to the court where their matter may
be pending, or even at pre-litigative stage, for such matter being taken up in the Lok Adalat
bench constituted for the purpose shall attempt to resolve the dispute by helping the parties to
arrive at an amicable solution and once it is successful in doing so, the award passed by it
shall be final which has as much force as a decree of a civil court obtained after due contest.
Finality of Lok Adalat award:

One issue which raises head often is the finality of the award of the Lok Adalat. During the
Lok Adalat, the parties agree to abide by the decision of the judge at the Lok Adalat.
However, it is often seen that later, the same order is challenged on several grounds. In one of
the recent decisions, the supreme court of India has once again laid to rest all such doubts. In
unequivocal terms, the court has held that award of the Lok Adalat is as good as the decree of
a court. The award of the Lok Adalat is fictionally deemed to be decrees of court and
therefore the courts have all the powers in relation thereto as it has in relation to a decree
passed by itself. This includes the powers to extend time in appropriate cases. The award
passed by the Lok Adalat is the decision of the court itself though arrived at by the simpler
method of conciliation instead of the process of arguments in court. Consent of parties: The
 P a g e | 28

most important factor to be considered while deciding the cases at the Lok Adalat is the
consent of both the parties. It cannot be forced on any party that the matter has to be decided
by the Lok Adalat. However, once the parties agree that the matter has to be decided by the
Lok Adalat, then any party cannot walk away from the decision of the Lok Adalat. In several
instances, the supreme court has held that if there was no consent the award of the Lok Adalat
is not executable and also if the parties fail to agree to get the dispute resolved through Lok
Adalat, the regular litigation process remains open for all contesting parties. The Supreme
Court has also held that compromise implies some element of accommodation on each side; it
is not apt to describe it as total surrender.

A compromise is always bilateral and means mutual adjustment. Settlement is termination of

legal proceedings by mutual consent. If no compromise or settlement is or could be arrived
at, no order can be passed by the Lok Adalat.

POWER OF LOK ADALAT

Lok Adalat has the same powers as those vested in a civil court under the code of civil
procedure, 1908 while trying a suit in respect of the following matters, namely-
a) the summoning and enforcing the attendance of any witness and examining him on oath,
b) the discovery and production of any document,
c) the reception of evidence on affidavits,
d) the requisitioning of any public record or document or copy of such record or document
from any court or office ande) Such other matters as may be prescribed.
Every Lok Adalat shall have the requisite powers to specify its own procedures for the
determination of any dispute coming before it. In Shashi Prateek v. Charan Singh Verma,11
the Allahabad High court observed:
The remedy to move for recalling the order/award obtained on the basis of playing fraud and
misrepresentation upon the petitioner and upon the Lok Adalat, cannot be foreclosed, for
simple reason that no court or tribunal can be regarded as powerless to recall its own order if
it is convinced that the order was obtained through fraud or misrepresentation of such a high
degree or dimension as would affect the very basis of claim.12

11
AIR 2009 All 109.
12
Sukumar Ray, Alternative Dispute Resolution, Eastern Law House, ed.2012, at p. 117.
 P a g e | 29

AWARD OF LOK ADALAT

The Legal Service Authorities Act does not contemplate nor require an adjuratory judicial
determination, but non-adjudicatory determination based on a compromise or settle, arrived
at by the parties, with guidance and assistance from Lok Adalat. The “award” of Lok Adalat
does not mean any independent verdict or opinion arrived at by any decision-making process.
The making of the award is merely an administrative act of incorporating the terms of
settlement or compromise agreed by parties in the presence of the Lok Adalat, in the form of
an executable order under the signature and seal of the Lok Adalat.13

Where no compromise or settlement is signed by the parties and the order of the Lok Adalat
does not refer to any settlement, but directs the respondent to either make payment if it agrees
to the order, or approach the High Court for disposal of appeal on merits, if it does not agree,
is not award of the Lok Adalat. Where an award is made by the Lok Adalat in terms of a
settlement arrived at between the parties, it becomes final and binding on the parties to the
settlement and becomes executable like a decree of a civil court. No appeal lies it to any
court.

If any party wants to challenge the award based on settlement, it can done only by filing a
petition under Article 226 and 227 of the constitution. But this can be done on very limited
grounds.14 In Dinesh Kumar v. Blbir Singh,15 the court can go into the legality of the
order/orders passed by the Lok Adalat or the permanent Lok Adalat if they are against the
letter and spirit of the Legal Service Authorities Act 1987.

ADVANTAGES OF LOK ADALAT

The benefits that litigants derive through Lok Adalat are many,

1. There is no court fee and even if the case is already filed in the regular court, the fee paid
will be refunded if the dispute is settled at the Lok Adalat.

13
Sukumar Ray, Alternative Dispute Resolution, Eastern Law House, ed.2012, at p. 91.
14
State of Punjab v. Jalour Singh, AIR 2008 SC 1209.
15
AIR 2008 HP 59.
 P a g e | 30

2. There is no strict application of the procedural laws and the Evidence Act while assessing
the merits of the claim by the Lok Adalat. The parties to the disputes though represented by
their Advocate can interact with the Lok Adalat judge directly and explain their stands in the
dispute and the reasons therefore, which is not possible in a regular court of law.
3. Disputes can be brought before the Lok Adalat directly instead of going to a regular court
first and then to the Lok Adalat.
4. The decision of Lok Adalat is binding on the parties to the dispute and its order is capable
of execution through legal process. No appeal lies against the order of the Lok Adalat
whereas in regular courts of law there is always a scope to appeal to the higher forum on the
decision of the trial court, which cause delay in the settlement of dispute finally. The reason
being that in a regular court, decision is that of the court but in Lok Adalat it is mutual
settlement and hence no case for appeal will arise. In every respect the scheme of Lok Adalat
is a boon to the litigant public, where they can get their disputes settled fast and free of cost.
5. Last but not the least, faster and inexpensive remedy with legal status.
The scheme also helped the overburdened court to alleviate the burden of arrears of cases and
as the award becomes final and binding upon both the parties, no appeal is filed in the
Appellate Court and, as such, the burden of the Appellate Court in hierarchy is also reduced.
The scheme is not only helpful to the parties but also to the overburdened courts to achieve
the constitutional goal of speedy disposal of the cases.

PERMENENT LOK ADALAT

During the last few years Lok Adalat has been found to be a successful tool of alternate
dispute resolution in India. It is most popular and effective because of its innovative nature
and inexpensive style. The system received wide acceptance not only from the litigants, but
from the public and legal functionaries in general. In India, during the last few years Lok
Adalat has been functioning continuously and permanently in every district centre. In taluk
centres also sittings of Lok Adalats have been held successfully. Several thousands of
pending cases and disputes which had not reached law courts has been settled through Lok
Adalats.

The Legal Service Authorities Act, 1987 provides for the conduct of Lok Adalats. Lok
Adalats can deal with pending cases which are referred to it for determination. Lok Adalats
are organised at regular intervals. The Legal Services Authorities Act has been amended in
 P a g e | 31

2002 with the object of establishing Permanent Lok Adalats. Sec. 22 B of the Act provides
for the establishment of the Permanent Lok Adalats. The Central Authority or every State
Authority shall, by notification, establish Permanent Lok Adalats. Every Lok Adalat
established for an area shall consist of the following persons:

1. A person who is, or has been a District Judge or Additional District Judge or has been held
judicial office higher in rank than that of a District Judge. He shall be the Chairman of the
Permanent Lok Adalat.

2. Two persons having adequate experience in public utility service. They are to be
nominated by the Central or State government on the recommendation of the Central or the
State authority.

The major defect of the mechanism of Lok Adalat is that it cannot take a decision, if one of
the parties, is not willing for a settlement, though the case involves an element of settlement.
The adamant attitude shown by one among the parties will render the entire process futile.
Even if all the members of the Lok Adalat are of the opinion that the case is a fit one for
settlement, under the present set-up, they cannot take a decision unless all the parties consent.

Any party to a dispute may, before the dispute is brought before any court, make an
application to the Permanent Lok Adalat for the settlement of the dispute. The Permanent
Lok Adalat shall not have jurisdiction in respect of any matter relating to an offence not
compoundable under any law. It shall not have jurisdiction in the matter where the value of
the property in dispute which exceeds rupees ten lacks. After an application is made to the
Permanent Lok Adalat a party to that application shall not invoke jurisdiction of any court in
the same dispute. When an application is made to the Permanent Lok Adalat, it shall direct
each party to file written statement stating the facts and nature of dispute. After filing of
written statement the Permanent Lok Adalat shall conduct conciliation proceedings. The
Permanent Lok Adalat shall assist the parties to reach an amicable settlement of dispute. If a
settlement is arrived at, in the conciliation proceedings, the Permanent Lok Adalat shall
formulate a settlement agreement and obtain signature on the settlement agreement and pass
an award in terms of that agreement. A copy of the award shall furnish to each of the parties
to the dispute. If the parties failed to reach an agreement, the Permanent Lok Adalat shall
decide the dispute. The award of the Permanent Lok Adalat shall be final and binding on all
the parties thereon and on persons claiming under them. Every award shall be deemed to be a
 P a g e | 32

decree of a Civil Court. The Permanent Lok Adalat shall transmit any award made by it to a
civil court having local jurisdiction to execute the same.
 P a g e | 33

LOK ADALAT CASE:- Dinesh Kumar vs Balbir Singh And Ors.

on 12 September, 2007
Equivalent citations: AIR 2008 HP 59, 2008 I ShimLC 54

PETITIONER- Dinesh Kumar

Vs.
RESPONDENT- Balbir Singh And Ors.

DATE OF JUDGEMENT:- 12/9/2008.

Author: R Sharma
Bench: R Sharma

FACTS

A challenge has been laid to the order dated 19.4.2003 passed by the Permanent Lok Adalat,
Kangra at Dharamshala in MACP No. 10-G/2002. . The brief facts necessary for the
adjudication of this petition are that the petitioner was driving his tempo bearing No. HP-20-
5587 on 13.11.2001 and was proceeding from Kaloha to Pragpur. Bus bearing registration
No. HP-55-3486 (M/s. Sayal Bus Service) came from Pragpur side and dashed against the
tempo resulting in grievous injuries to the petitioner. The accident took place around 10.30
A.M. He was firstly taken to hospital at Dehra (District Kangra) and thereafter underwent
treatment in Bharaj Nursing Home, Jallandhar Road, Hoshiarpur. He remained indoor patient
in Bharaj Nursing Home with effect from 13.11.2001 to 17.11.2001 and also underwent
surgical operation costing Rs. 80,000/-. He filed a petition before the Motor Accident Claims
Tribunal-1, Kangra at Dharamshala in the month of January, 2002 claiming the compensation
for the grievous injuries received in the accident resulting in fracture of right Tibia and many
other injuries. He had claimed in all Rs. 3 lakhs towards compensation.

Respondents No. 1 and 2 had filed detailed reply to the claim petition and had admitted that
the bus was insured with New India Insurance Company Limited, Branch Office Dev Pal
Chowk, Hamirpur i.e. respondent No. 3. The respondent No. 3 had also filed separate reply
and in preliminary objection it has denied that the bus bearing No. HP-55-3486 was insured
with it. The objection was also taken with regard to the validity of the driving licence of the
 P a g e | 34

petitioner besides the objections of invalid certificate of registration. The learned Motor
Accident Claims Tribunal issued notices to the respondents on 28.2.2002. The Motor
Accident Claims Tribunal, Kangra at Dharamshala has passed the following order on
19.2.2003:

ISSUE

*Whether any case is referred to a Lok Adalat under Sub-section (1) or where a reference has
been made to it under Sub-section (2), the Lok Adalat shall proceed to dispose of the case or
matter and arrive at a compromise or settlement between the parties?

*Whether Section 20 postulates the cases of which the Lok Adalat can take cognizance?

RATIO

This Court is of the view that despite expression used in Sub-section (2) of Section 21 of the
Act that no appeal shall lie to any Court against the award and the expression used like
original suit, application or execution proceedings as mentioned in Sub-section (4) of Section
22(E) will not include the writ jurisdiction. Thus the contention of Mr. B.M. Chauhan with
regard to the maintainability and the adjudication of the writ petition by this Court is
untenable and rejected. The Court has also to ensure that the provisions of the Legal Services
Authorities Act, 1987 are implemented in letter and spirit. The manner in which the
jurisdiction has been exercised by the Permanent Lok Adalat is against the very spirit of the
Act.

In case P.T. Thomas v. Thomas Job , cited by Mr. B.M. Chauhan, Advocate will not apply in
the present case since the order passed by the Permanent Lok Adalat is without jurisdiction.

JUDGMENT

The writ petition is allowed. the Permanent Lok Adalat is set aside. The matter is remanded
back to the learned Motor Accident Claims Tribunal, Kangra at Dharamshala with the
directions to decide the same on its own merits within a period of three months from the date
of receipt of record along with copy of this judgment In view of the facts and circumstances
of the case and the manner in which the matter has been compromised by the functionary of
respondent No. 3-company, a costs of Rs. 11,000/- is imposed upon the Divisional Manager
of the New India Assurance Company Limited on whose statement the matter was
 P a g e | 35

compromised. The respondent No. 3 will ensure that the cost is recovered from the Divisional
Manager. To avoid further delay the parties are directed to appear before the learned Motor
Accident Claims Tribunal, Kangra at Dharamshala on 13.10.2007.

CONCLUSION

Lok Adalats play a very important role to advance and strengthen “equal access to justice”,
the heart of the Constitution of India, a reality. This Indian contribution to world ADR
jurisprudence needs to be taken full advantage of. Maximum number of Lok Adalats needs to
be organized to achieve the Gandhian Principle of Gram Swaraj and “access to justice for
all”.
Lok Adalat lends itself to easy settlement of money claims; there is scope for other disputes
as well. Partition suits damages and matrimonial cases can be easily settled before Lok
Adalat as the scope for compromise through an approach of give and take is high in these
cases. In Lok Adalat justice is dispensed summarily without too much emphasis on legal
technicalities. It has to be a very effective alternative to litigation. Lok Adalat is a boon to the
litigant public, where they can get their dispute settled faster and at free of cost. Experience
has shown that it’s one of the efficient and important ADR and most suited to the Indian
environment, culture and social interests. Objective of Lok Adalat is to settle the disputes
which are pending before the courts, by negotiations, conciliation and by adopting persuasive
common sense and human approach to the problems of the disputants. The large population
of India and the illiterate masses have found the regular dispensation of justice through
regular courts very cumbersome and ineffective. The special condition prevailing in the
Indian society and due to economic structure, highly sensitized legal service is required
which is efficacious for the poor and the ignorant masses. The Lok Adalat movement is no
more an experiment in India. It’s now a success and needs to be replicated in certain matters.
It properly, thoughtfully, and wisely constituted, Lok Adalats can become an additional arm
of existing judicial institution, and moreover, if the process of accumulation of arrears is
reversed and there is less burdening, its qualitative performance can improve.
 P a g e | 36

Chapter:- V

LEGAL AID CLINIC

INTRODUCTION

The provision of legal aid to the poor and the disadvantaged exists in all civilised countries,
often guided by charitable and philanthropic concerns. In a democratic set-up, the philosophy
of legal aid has acquired a new meaning, with an emphasis on the concept of equality of all
human beings, increasingly drawn from the universal principles of human rights. Free legal
aid to the poor and marginalised members of society is now viewed as a tool to empower
them to use the power of the law to advance their rights and interests as citizens, and as
economic actors. Such a paradigm shift in the concept of legal aid gains greater importance
when India is viewed as a growing economic power.

Parliament enacted the Legal Services Authorities Act, 1987 in order to give effect to Article
39-A of the Constitution to extend free legal aid, to ensure that the legal system promotes
justice on the basis of equal opportunity. (November 9 is observed as National Legal Services
Day, to commemorate the enactment of the legislation.) Those entitled to free legal services
are members of the Scheduled Castes and the Scheduled Tribes, women, children, persons
with disability, victims of ethnic violence, industrial workmen, persons in custody, and those
whose income does not exceed a level set by the government (currently it is Rs.1 lakh a year
in most States). The Act empowers legal services authorities at the district, State and national
levels, and the different committees (legal services institutions) to organise Lok Adalats to
resolve pending and pre-litigation disputes. It provides for permanent Lok Adalats to settle
disputes involving public utility services. Under the Act, “legal services” have a meaning that
includes rendering of service in the conduct of any court-annexed proceedings or proceedings
before any authority, tribunal and so on, and giving advice on legal matters. Promoting legal
literacy and conducting legal awareness programmes are functions of legal services
institutions.

An act to constitute legal services authorities to provide free and competent legal service to
the weaker sections of the society to ensure that opportunities for securing justice are not
denied to any citizens by reason of economic or other disabilities, and to organize Lok
 P a g e | 37

Adalats to secure that the operation of the legal system promotes justice on a basis of equal
opportunity.

India is a developing country. The development in the industrial sector is very much
appreciable, but still this progress in the field of industrialization, marketing, finance, etc.
cannot hide the indispensable drawbacks of our society like population explosion and
illiteracy. These drawbacks, coupled with environmental and social hinges results in increase
in poverty and lack of food for people.

It is true that the country is going through the phase of development but all the fruits of this
tree are being en- cashed by those who stay in the upper half of the society. The poor resides
in their own world of DARKNESS.

But those who are still neglected are the main foundation of the society that is to be
remembered. So misusing their ignorance and encashing the fruits for the benefit of the upper
half of our society is not at all good for the future of the country.

The society is divided into two parts, according to financial standard, namely HAVES and the
HAVE NOTS. In our country with 100 million people, only a little part of the population
comes within the purview of the HAVES, whereas, the Lion’s share is the HAVE NOTS.

The HAVE NOTS as well as the HAVES both looks for earning their livelihood, looking for
the benefit of their family, giving a good future to the next generation, some are successful to
it, some are not.16

A legal clinic or law clinic is a nonprofit law practice serving the public interest. Legal clinics
originated as a method of practical teaching of law school students, but today they encompass
also free legal aid with no academic links. In the academic context, these law school clinics
provide hands-on experience to law school students and services to various (typically
indigent) clients. Academic Clinics are usually directed by clinical professors.[1] Many legal
clinics offer pro bono work in one or more particular areas, providing free legal services to
clients. The remainder of this article will discuss clinical legal education.17

16
www.legalserviceindia.com, on 17/11/14 on 01:19pm.
17
en.wikipedia.org, on 17/11/14 at 12:49pm.
 P a g e | 38

In this ways both categories of people spend most of their lives overlooking a lot of facts,
intentionally or unintentionally, that a lot of wrongs are being done against them. Other
people, or the Government or whoever may be is infringing their rights. But the wronged
ones are not very eager to protest against the wrong doer. Even some times they are not
knowledgeable enough that a wrong is being done against them. If they do not know that a
wrong is being done, it is a different scenario. But if they know about the fact, they are still
not standing against it. As because, it may cause a lot of problem in their field of profession
and might have to face a bigger loss. In this way they are actually ABATING THE WRONG.
So, for both the categories of people it is necessary to make them understand what sort of
wrongs they actually are facing and the abatement is also causing a greater harm to the
society and it can hamper the well being of their own next generation. The Legal Aid Clinic
has been working to secure “justice for and to protect the rights of the needy.18

WHAT IS LEGAL AID

Under Section 2(1)(c) of the Legal Services Authorities Act, 1987 (hereinafter referred to as
‘the said Act’), “Legal Service” includes the rendering of any service in the conduct of any
case or other legal proceeding before any court or other authority or tribunal and the giving of
advice on any legal matter; To provide free and competent legal services to the weaker
section of the society was the basic object of enacting the aforesaid Act. Justice - social,
economic and political, is our constitutional pledge enshrined in the preamble of our
Constitution. The incorporation of Article 39-A in the Directive Principles of State Policy in
the year 1976, enjoined upon the State to ensure justice on the basis of equal opportunity by
providing free legal aid.

The assumption of our legal system is that all citizens have equal access to means of legal
redress. Access to inexpensive and expeditious justice is a basic human right. But, in practice,
legal services of all kinds have gone to the highest bidders. Wealthy persons and large
corporations receive the highest quality advice. There should be a system of administration of
justice of which the poorest are able to take advantage. Equal access to the law for the rich
and the poor alike is essential for the maintenance of the rule of law. It is, therefore, essential
to provide adequate legal advice and representation to all those, threatened as to their life,
liberty, property or reputation, who are not able to pay for it.

18
law.ku.edu, on 17/11/14 at 12:05pm.
 P a g e | 39

Legal aid is the provision of assistance to people otherwise unable to afford legal
representation and access to the court system. Legal aid is regarded as central in providing
access to justice by ensuring equality before the law, the right to counsel and the right to a
fair trial. This article describes the development of legal aid and its principles, primarily as
known in Europe, the British Commonwealth, India and the United States.

A number of delivery models for legal aid have emerged, including duty lawyers, community
legal clinics and the payment of lawyers to deal with cases for individuals who are entitled to
legal aid.

Legal aid is essential to guaranteeing equal access to justice for all, as provided for by Article
6.3 of the European Convention on Human Rights regarding criminal law cases. Especially
for citizens who do not have sufficient financial means, the provision of legal aid to clients by
governments will increase the likelihood, within court proceedings, of being assisted by legal
professionals for free (or at a lower cost) or of receiving financial aid.19

Legal aid is required in many forms and at various stages, for obtaining guidance, for
resolving disputes in Courts, tribunals or other authorities. It has manifold facets. The
explosion in population, the vast changes brought about by scientific, technological and other
developments, and the all round enlarged field of human activity reflected in modern society,
and the consequent increase in litigation in Courts and other forums demand that the service
of competent persons with expertise in law is required in many stages and at different forums
or levels and should be made available.20

Free legal aid undoubtedly is beneficial to poor people and has been instituted with the noble
purpose. Yet it has become a good ground for breeding corruption. Free legal aid for a fee is
common practice. Once a lawyer is engaged through legal aid, obviously the party or his men
would come to the lawyer for consultation and it is then that they are asked to fish out some
money, which they naturally cannot refuse. One factor that largely contributes to this is that
the meager remuneration (less than Rs. 200/-) paid to the lawyers by Legal Aid Committee is
a paltry and sometimes even does not meet the incidental expenses, what to speak of
compensating the labour put in by the lawyer. Beyond that, the greed to pocket some easy
money out of the helplessness of the victims is always there. But what speaks worst about the

19
en.wikipedia.org, on 17/11/14 at 12:58pm.
20
http://www.businessdictionary.com, on 17/11/14 at 01:00pm.
 P a g e | 40

system is the fact that entrustment of cases under the scheme has become a case of
distribution of largess amongst the favorites just as our Governments are notorious for
distribution of licenses. The distribution is guided by many factors but largely other than by
reason and the capacity to deliver the goods. In the circumstances, expectedly, the quality of
aid is compromised to the determent of the beneficiary and, of course, Justice. The whole
purpose is, thus, defeated.

CONCEPT OF LEGAL AID

Legislative History - The right to assignment of counsel at Government expenses was

emphasized in the 14th Law Commission Report. Thereafter, in 1969, the Law Commission
again strongly recommended that the right of the accused to representation at the cost of
Government should be placed on statutory footing in relation to trials for serious offences and
as a first step in this direction, the Commission proposed that such a right should be available
in all trials before the Court of Session.

In order to achieve the objective enshrined in Article 39-A of the Constitution, Government
had, with the object of providing free legal aid, by a Resolution appointed a Committee for
implementing Legal Aid Scheme to monitor and implement Legal Aid Programmes on a
uniform basis in all States and Union Territories. The said Committee evolved a model
scheme which was accordingly implemented by the Government. But on review, certain
deficiencies were found and it was considered desirable to constitute statutory legal
authorities at National, State and district levels so as to provide effective monitoring of Legal
Aid Programmes.

For the disposal of large number of cases expeditiously and without much cost Lok Adalats
have been constituted and they have been functioning as a voluntary and conciliatory agency
without any statutory backing for its decisions. In order to provide for the composition of
statutory legal authorities and to provide statutory backing to Lok Adalats and its awards the
Legal Services Authorities Bill, 1987, was introduced in the Lok Sabha on 24th August 1987.

Article 39-A of the Constitution provides that the State shall secure that the operation of the
legal system promotes justice on a basis of equal opportunity, and shall, in particular, provide
free legal aid, by suitable legislation or schemes or in any other way, to ensure that
opportunities for securing justice are not denied to any citizen by reason of economic or other
 P a g e | 41

disabilities. With the object of providing free legal aid, Government had, by Resolution,
appointed the “Committee for Implementing Legal Aid Schemes” (CILAS) under the
Chairmanship of Mr. Justice P.N. Bhagwati (as he then was) to monitor and implement Legal
Aid Programmes on a uniform basis in all the States and Union territories CILAS evolved a
model scheme for Legal Aid Programme applicable throughout the country by which several
Legal Aid and Advice Boards have been set up in the States and Union territories, in funded
wholly by grants from the central Government.

Object of the enactment of the said Act - In our democratic set-up, all laws are made for all
men - common or uncommon. By common man, in common parlance, we understand a man
on the street. A man who may not have any status, office, post or rank in society. He is only a
human being, an ordinary citizen with expectations of a just and human order. He may be a
Tom, Dick or Harry, Ram, Rahim or Shyam. The Expression includes a cobbler, sweeper,
baker, butcher, a priest, or a soldier. A person of whatever name and nomenclature known in
the society. A legal system and its effectiveness has to be gauged or measured by the extent
of its usefulness to the common man. The failure of law for common man is due to no change
of hear or outlook of other fellow beings who are privileged and have a better status in the
society. There has been no emotional integration between haves in the society and have nots.
The society cannot be improved by laws. Social reforms are done not by laws but by leaders
in the society who are virtuous, wise and of high moral character. Before making the laws or
along with them, no attempts have to be made on behalf of the State of their agencies to
spread moral education to encourage science with spirituality. The spirituality and science
alone can rule the world including the government based on democracy in the absence of any
effort in proper direction, the common man is deprived of the benefit of the laws enacted for
him which do not reach him due to inefficient bureaucracy and mal-administration.21

PERSONS WHO ARE ENTITLED TO GET FREE LEGAL AID

UNDER THE LEGAL SERVICE AUTHORITY, 1987

Criteria for giving legal service are prescribed under the Section 12 of the said Act. Every
person who has to file or defend a case shall be entitled to legal services under this Act if that
person is –a. a member of a Scheduled Caste of Scheduled Tribe; b. a victim of trafficking in

21
www.legalserviceindia.com, on 17/11/14 on 01:19pm.
 P a g e | 42

human beings or beggar as referred to in Article 23 of the Constitution; c. a women or a

child;
d. a person with disability as defined in Clause (i) of Section 2 of the person with Disabilities
(Equal Opportunities, Protection of Rights and Full Participation)’ Act, 1995 . e. a person
under circumstances to the underserved want such as being victim of mass disaster, ethnic
violence, caste atrocity, flood, drought, earthquake or industrial disaster; or an industrial
workman; or in custody, including custody in a protective home within the meaning of clause
(g) of Section 2 of the Immoral Traffic (prevention) Act, 1956 (104 of 1956), or in a juvenile
home within the meaning of clause (j) of Section 2 of the Juvenile Justice Act, 1986 (53 of
1986), or in a psychiatric hospital or psychiatric nursing home within the meaning of clause
(g) of Section 2 of the Mental Health Act, 1987 (14 of 1987); or in receipt of annual income
less than rupees nine thousand or such other higher amount as may be prescribed by the State
Government, if the case is before a court other than the supreme Court, and less than rupees
twelve thousand or such other higher amount as may be [prescribed by the Central
Government, if the case is before the Supreme Court.

Also, there are factors for disentitlement from getting legal aid - As per rules, the following
persons are not entitled to the legal aid unless the Chairman of the Committee approves it as a
special case- (1) Proceedings wholly or partly in respect of defamation or malicious
prosecution or any incidental proceedings thereto; (2) A person charged with contempt of
court proceeding or any incidental proceedings thereto; (3) A person charged with perjury;
(4) Proceedings relating to any election. (5) Proceedings in respect of offences where the fine
imposed is not more than Rs. 50/- (6) Proceedings in respect of economic offences and
offences against social laws, such as, the protection of Civil Rights Act, 1955, and the
Immoral Traffic (Prevention) Act, 1956 unless in shc cases the aid is sought by the victim :
The legal aid is also denied where the person seeking the legal services - (1) is concerned
with the proceedings only in a representative or official capacity; or (2) if a formal party to
the proceedings, not materially concerned in the outcome of the proceedings and his interests
are not likely to be prejudiced on account of the absence of proper representation.

In the above two circumstances even Chairman cannot sanction legal aid as a special case.
 P a g e | 43

CONSTITUTIONAL PROVISION RELATING TO LEGAL AID

Legal aid a constitutional right - Articles 21 and 39-A of the Constitution are as under:-
“21. Protection of life and personal liberty – No person shall be deprived of his life or
personal liberty except according to procedure established by law. “39A. Equal justice and
free legal aid - The state shall secure that the operation of the legal system promotes Justice
on a basis, of equal opportunity, and shall in particular, provide free legal, aid, by suitable
legislation or schemes or in any other way, to ensure that opportunities for securing Justice
are not denied to any citizen by reason of economic or other disabilities”.

Article 21 is a fundamental right conferred under Part III of the Constitution. Whereas Article
39-A is one of the directive principles of the State Policy under Part IV of the Constitution. It
has been held by the Constitution Bench of Supreme Court in Chandra Bhawan Boarding
and Lodging, Bangalore V. –State of Mysore,22 that “While rights conferred under Part III are
fundamental, the directives given under part IV are fundamental in the governance of the
country. There is no conflict on the whole between the provisions contained in Part III and
Part IV. They are complementary and supplementary to each other.

The Supreme Court in Hussainara Kathoon vs.. Home Secretary, State of Bihar,23 had called
upon the Government to frame appropriate scheme for providing legal aid to the poor. The
following observations were made by the Supreme Court:

“We may also take this opportunity of impressing upon the Government of India as also the
State Governments, the urgent necessity of introducing a dynamic and comprehensive legal
service programme with a view to reaching justice to the common man. Today, unfortunately,
in our country the poor are priced out of the judicial system with the result that they are
losing faith in the capacity of our legal system to being about changes in their life conditions
and to deliver justice to them. The poor in their contact with legal system have always been
on the wring side of the law. They have always come across ‘law for the poor’ rather than
‘law of the poor’. The law is regarded by them as something mysterious and forbidding-
always taking something away from them and not as a positive and constructive social device
for changing the socio-economic order and improving their life conditions by conferring
rights and benefits on them. The result is that the legal system has lost its credibility for the

22
AIR 1970 SC 2042.
23
AIR 1979 SC 1369: 1980 [1] SC 98: 1979 [3] SCR 532: 1979 Cri LJ 1045 : 1980 SCC [Cr] 40.
 P a g e | 44

weaker sections of the community. It is, therefore, necessary that we should inject equal
justice into legality and that can be done only by dynamic and activist scheme of legal
services.”

In Abdul Hassan Vs. Delhi Vidyut Board,24 the Delhi High Court observed that “it is
emphasized in Article 39A that the legal system should be able to deliver justice
expeditiously on the basis of equal opportunity and provide free legal aid to ensure that
opportunities for securing justice are not denied to any citizen by reasons of economic or
other disabilities. It was in this context that the parliament enacted Legal Services Authority
Act, 1987. One of the aims of the Act is to organize Lok Adalat to secure that the operation
of legal system promotes justice on the basis of an equal opportunity. The provisions of the
Act, based on indigenous concept are meant to supplement the court system. They will go a
long way in resolving the 0dispute at almost no cost to the litigants and with minimum delay.
The Act is a legislative attempt to decongest the courts of heavy burden of cases.”

The Hon’ble Apex Court found and observed in the case of State of Haryana v. Smt.
Darshana Devi,25 no State, it seems, has , as yet, framed rules to give effect to the benignant
provision of legal aid to the poor in Order XXXIII Rule 9-A, Civil Procedure Code, although
several years have passed since the enactment. Parliament is stultified and the people are
frustrated. Even after a law has been enacted for the benefit of the poor, the State does not
bring into force by willful default in fulfilling the condition sine qua non. It is public duty of
each great branch of Government to obey the rule of law and uphold the tryst with the
Constitution by making rules to effectuate legislation meant to help the poor.

IMPORTANCE OF LEGAL AID

The importance of Legal Aid and Awareness Campaigns as a mechanism for social progress
is something that has been repeatedly stressed upon by the Government of India. In the
backdrop of Poverty and Inequality, Legal Aid is an effective way towards attainment of the
ideals of ‘Social, Economic and Political’ Justice that are enshrined in our Constitution under
the Directive Principles of State Policy.

24
AIR 1999 Del 88: 1999 (77) DLT 640 : 1999 (2) AD (Del) 105.
25
AIR 1979 SC 855 : 1979 [2] SCC 236: 1979 [3] SCR 184.
 P a g e | 45

The Legal Aid Implementation Committee of the Government of India formed out of the
constructive suggestions of the Bhagwati Committee on Jurisdicare of 1977 had envisaged
the setting up of legal aid dispensation clinic in the various state – run law schools. Thirty
years hence we stand in a situation where the West Bengal National University of Juridical
Sciences can state that they have indeed met with the suggestions of this committee by way
of its own Legal Aid Clinic. The establishment of the National Law Universities in the
various parts of the country has opened the gateway to work towards this cause in a greater
way. Through a mutually beneficial process of exchange, awareness is spread amongst the
masses about their legal rights and duties, and how to go about seeking the same, and
students of law get exposed to the various problems associated with the ‘real world’, thereby
gaining practical knowledge on the subject.

The entire purpose of setting nation wide collegiate clinics is to acclimatize several thousand
law students of the nation to the problems faced by the masses ignorant about their rights and
remedies under the law. The aim is indeed a noble one but there difficulties which still need
to be addressed.

The WBNUJS Legal Aid Cell is one successful beacon while there many more colleges
where such beacons need to be lighted, many thousands whose legal dilemmas need to be
efficiently addressed. In the recently concluded ‘Intra-State Conference on Legal
Networking in West Bengal’, held at The West Bengal National University of Juridical
Sciences(WBNUJS), Prof. B.B. Pande, retired Faculty Advisor of the Legal Aid Society at
The Delhi University Faculty of Law, which was the birthplace of the legal awareness
campaigns in Law Universities, highlighted the importance of a systematic approach
tempered with the right intention, and identified WBNUJS as having the most functional
Legal Aid Clinic in India.26

26
www.nujs.edu, on 17/11/14 at 02:38pm.
 P a g e | 46

RECENT AMENDMENTS TO MADE TO THE LEGAL

SERVICE AUTHORITIES ACT, 1987

The Legal Services Authorities Act, 1987 was enacted to constitute legal services authorities
for providing free and competent legal services to the weaker sections of the society to ensure
that opportunities for securing justice were not denied to any citizen by reason of economic
or other disabilities and to organize Lok Adalats to ensure that the operation of the legal
system promoted justice on a basis of equal opportunity. The system of Lok Adalat, which is
an innovative mechanism for alternate dispute resolution, has proved effective for resolving
disputes in a spirit of conciliation outside the courts.

However, the major drawback in the existing scheme of organization of the Lok Adalats
under Chapter VI of the said Act is that the system of Lok Adalats is mainly based on
compromise or settlement between the parties. If the parties do not arrive at any compromise
or settlement, the case is either returned to the court of law or the parties are advised to seek
remedy in a court of law. This causes unnecessary delay in the dispensation of justice. If Lok
Adalats are given power to decide the cases on merits in case parties fails to arrive at any
compromise or settlement, this problem can be tackled to a great extent. Further, the cases
which arise in relation to public utility services such as Mahanagar Telephone Nigam
Limited, Delhi Vidyut Board, etc., need to be settled urgently so that people get justice
without delay even at pre-litigation stage and thus most of the petty cases which ought not to
go in the regular courts would be settled at the pre-litigation stage itself which would result in
reducing the workload of the regular courts to a great extent. It is, therefore, proposed to
amend the Legal Services Authorities Act, 1987 to set up Permanent Lok Adalats for
providing compulsory pre-litigative mechanism for conciliation and settlement of cases
relating to public utility services.

The salient features of the amendment are as follows:

1) to provide for the establishment of Permanent Lok Adalats which shall consist of a
Chairman who is or has been a district judge or additional district judge or has held judicial
office higher in rank than that of the district judge and two other persons having adequate
experience in public utility services;
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2) (ii) the Permanent Lok Adalat shall exercise jurisdiction in respect of one or more public
utility services such as transport services of passengers or goods by air, road and water,
postal, telegraph or telephone services, supply of power, light or water to the public by any
establishment, public conservancy or sanitation, services in hospitals or dispensaries; and
insurance services;

3) (iii) the pecuniary jurisdiction of the Permanent Lok Adalat shall be up to rupees ten lakhs.
However, the Central Government may increase the said pecuniary jurisdiction from time to
time. It shall have not jurisdiction in respect of any matter relating to an offence not
compoundable under any law;

4) (iv) it also provides that before the dispute is brought before any court, any party to the
dispute may make an application to the Permanent Lok Adalat for settlement of the dispute;

5) (v) where it appears to the Permanent Lok Adalat that there exist elements of a settlement,
which may be acceptable to the parties, it shall formulate the terms of a possible settlement
and submit them to the parties for their observations and in case the parties reach an
agreement, the Permanent Lok Adalat shall pass an award in terms thereof. In case parties to
the dispute fail to reach an agreement, the Permanent Lok Adalat shall decide the dispute on
merits; and

6) (vi) every award made by the Permanent Lok Adalat shall be final and binding on all the
parties thereto and shall be by a majority of the persons constituting the Permanent Lok
Adalat.27

LEGAL AID CASE:-Sheela Barse vs State Of Maharashtra on 15

February, 1983

SUPREME COURT OF INDIA

Equivalent citations: 1983 AIR 378, 1983 SCR (2) 337
P PETITIONER: SHEELA BARSE
Vs.
RESPONDENT: STATE OF MAHARASHTRA
DATE OF JUDGMENT15/02/1983
Author: P Bhagwati
Bench: Bhagwati

27
www.thehindu.com, on 17/11/14 at 01:11pm
 P a g e | 48

FACTS

Legal Aid to the poor-Importance of legal aid to the poor explained-Directions given to
Prison authorities and police on providing Legal aid to the poor prisoners. The petitioner, a
journalist, in her letter addressed to this Court stated that Five out of fifteen women prisoners
interviewed by her in the Bombay Central Jail alleged that they had been assaulted by the
police in the police lock up and two of them in particular alleged that they had been assaulted
and tortured in the lock up. Treating the letter as a writ petition the Court issued notices to all
concerned to show cause why the writ petition should not be allowed In the meanwhile the
Director of the College of Social Work custodians. It is also possible that he or the members
of his family may have other problems where legal assistance is required but by reason of his
being incarcerate. it may be difficult if not impossible for him or the members of his family to
obtain proper legal advice or aid. It is therefore essential that legal assistance must be made
available to prisoners in jails whether they be under-trials or convicted prisoners. 338 The
Inspector General of Prisons in Maharashtra should issue a circular to all Superintendents of
Jails in Maharashtra requiring them to send to the Legal Aid Committee of each district in
which the jail is situated.

ISSUES

*Whether the Police officer (accused) has violated the provisions of the Article 14, 21 &39 A
of the Constitution of India?

RATIO

section 54 of the Code of Criminal Procedure 1973 to be medically examined. We are aware
that section 54 of the Code of Criminal Procedure 1973 undoubtedly provides for
examination of an arrested person by a medical practitioner at the request of the arrested
person and it is a right conferred on the arrested person. But very often the arrested person is
not aware of this right and on account of his ignorance, he is unable to exercise this right
even though he may have been tortured or malterated by the police in police lock up.

JUDGEMENT

The writ petition will stand disposed of in terms of this order.

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CONCLUSION

An act to constitute legal services authorities to provide free and competent legal service to
the weaker sections of the society to ensure that opportunities for securing justice are not
denied to any citizens by reason of economic or other disabilities, and to organize Lok
Adalats to secure that the operation of the legal system promotes justice on a basis of equal
opportunity.

India is a developing country. The development in the industrial sector is very much
appreciable, but still this progress in the field of industrialization, marketing, finance, etc.
cannot hide the indispensable drawbacks of our society like population explosion and
illiteracy. These drawbacks, coupled with environmental and social hinges results in increase
in poverty and lack of food for people. Legal aid is required in many forms and at various
stages, for obtaining guidance, for resolving disputes in Courts, tribunals or other authorities.
It has manifold facets. The explosion in population, the vast changes brought about by
scientific, technological and other developments, and the all round enlarged field of human
activity reflected in modern society, and the consequent increase in litigation in Courts and
other forums demand that the service of competent persons with expertise in law is required
in many stages and at different forums or levels and should be made available.
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Chapter:- VI

CONCLUSION

Alternative Dispute Resolution ("ADR") refers to any means of settling disputes outside of
the courtroom. ADR typically includes early neutral evaluation, negotiation, conciliation,
mediation, and arbitration. As burgeoning court queues, rising costs of litigation, and time
delays continue to plague litigants, more states have begun experimenting with ADR
programs. Some of these programs are voluntary; others are mandatory. Many individuals
and entities still resist ADR because it lacks the substantive, procedural, and evidentiary
protections available in formal civil litigation. For example, parties to ADR typically waive
their rights to object to evidence that might be deemed inadmissible under the rules of court.
Hearsay evidence is a common example of evidence that is considered by the parties and
intermediaries in ADR forums but that is generally excluded from civil trials. If a disputant
believes that he or she would be sacrificing too many rights and protections by waiving the
formalities of civil litigation, ADR will not be the appropriate method of dispute resolution.

An arbitration agreement is a written contract in which two or more parties agree to settle a
dispute outside of court. The arbitration agreement is ordinarily a clause in a larger contract.
The dispute may be about the performance of a specific contract, a claim of unfair or illegal
treatment in the workplace, a faulty product, among other various issues. People are free to
agree to use arbitration concerning anything that they could otherwise resolve through legal
proceedings.

Conciliation is a voluntary proceeding, where the parties involved are free to agree and
attempt to resolve their dispute by conciliation. The process is flexible, allowing parties to
define the time, structure and content of the conciliation proceedings. These proceedings are
rarely public. They are interest-based, as the conciliator will when proposing a settlement, not
only take into account the parties' legal positions, but also their; commercial, financial and /
or personal interests.

Lok Adalat, as the name suggest means People’s Court. ‘Lok’ stands for People and the word
‘Adalat’ means Court. Lok Adalat is a special kind of people’s court in which disputes solved
by direct talks between the litigants. The members of legal profession, college students, social
organisations, charitable and philanthropic institutions and other similar organisations may be
 P a g e | 51

associated with Lok Adalat. Lok Adalat is a boon to the litigant public, where they can get
their dispute settled faster and at free of cost. Experience has shown that it’s one of the
efficient and important ADR and most suited to the Indian environment, culture and social
interests. Objective of Lok Adalat is to settle the disputes which are pending before the
courts, by negotiations, conciliation and by adopting persuasive common sense and human
approach to the problems of the disputants. The large population of India and the illiterate
masses have found the regular dispensation of justice through regular courts very
cumbersome and ineffective. The special condition prevailing in the Indian society and due to
economic structure, highly sensitized legal service is required which is efficacious for the
poor and the ignorant masses. The Lok Adalat movement is no more an experiment in India
Lok Adalats play a very important role to advance and strengthen “equal access to justice”,
the heart of the Constitution of India, a reality.

Legal aid is required in many forms and at various stages, for obtaining guidance, for
resolving disputes in Courts, tribunals or other authorities. It has manifold facets. The
explosion in population, the vast changes brought about by scientific, technological and other
developments, and the all round enlarged field of human activity reflected in modern society,
and the consequent increase in litigation in Courts and other forums demand that the service
of competent persons with expertise in law is required in many stages and at different forums
or levels and should be made available.